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What was the carrying amount of the installment note

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Question - The following journal entry was made by your predecessor to record the annual payment on a 5%, 10-year installment note.

ACCOUNTING EQUATION - DATE: DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

Oct. 1 Interest Expense 710 227,040.00

Notes Payable 215 475,522.00

Cash 110 702,562.00

Using the information provided, compute the following amounts.

Required -

1. What was the carrying amount (book value) of the installment note before the payment on October 1?

2. What portion of next year's payment will be interest?

Reference no: EM132740579

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